Dubai Property Myths First-Time Buyers Get Wrong

Dubai’s real estate market is arguably the most talked-about property sector in the world. It is a city of superlatives—highest towers, fastest growth, and admittedly, some of the loudest opinions.

For first-time buyers, especially expatriates, navigating this market can feel like walking through a maze of contradictions. One friend tells you it’s the best investment they ever made; another warns you about "over-supply" or "hidden fees." Much of this hesitation is shaped by outdated regulations from 2008, assumptions carried over from home countries, or "coffee shop advice" that simply doesn't match the data.

The truth? The Dubai property market of 2025 is vastly different from the market of 2015. It is regulated, digitized, and increasingly geared toward long-term residents.

Below, we break down the five most persistent myths and dismantle them using actual market data, RERA regulations, and on-ground financial realities.

Myth #1: Expats Can’t Truly Own Property in Dubai

The Verdict: False.

Reality: Expats have enjoyed 100% Freehold ownership rights for nearly two decades.

This is the "grandfather" of all Dubai myths. It persists because, prior to 2002, foreign ownership was indeed restricted. However, the legal landscape shifted permanently with the introduction of Law No. 7, 2006 (The Real Estate Registration Law).

Freehold vs. Leasehold: Knowing the Difference

To understand ownership, you must distinguish between the two main categories:

• Freehold: You own the unit and the land it stands on in perpetuity. This is yours to sell, lease, renovate, or pass down to heirs. There is no time limit on your ownership.
• Leasehold: You own the rights to the unit for a set period (usually 99 years), but the land belongs to a landlord.

Where can you buy Freehold?

The government has designated specific "Freehold Zones" where foreigners have absolute rights. These aren't obscure outskirts; they represent the most desirable real estate in the city.

• Prime Luxury: Dubai Marina, Downtown Dubai, Palm Jumeirah.
• Family/Villa Communities: Arabian Ranches, Dubai Hills Estate, The Springs, Damac Hills.
• Emerging/Affordable: Jumeirah Village Circle (JVC), Business Bay, Dubai South.

The Document That Proves It

When you buy a completed property in these zones, you receive a Title Deed issued by the Dubai Land Department (DLD). This is a government-issued document that grants you the same ownership rights you would expect in the UK, USA, or Europe.

Myth #2: Buying Is Riskier Than Renting in Dubai

The Verdict: False (with conditions).

Reality: In a rising rental market, buying is your only hedge against inflation.

While the rent versus buy debate is often framed purely around returns, first-time buyers tend to underestimate how lifestyle costs, service charges, rent increases, and mobility affect the long-term equation. A neutral breakdown of how rent, ownership costs, and everyday living expenses compare across Dubai communities is explained in this Dubai living guide, which looks beyond investment math and focuses on real, day-to-day outcomes.

The Financials: Rent vs. Buy

Let’s look at the data. Dubai rents have seen significant double-digit growth in post-pandemic years.

The Renter's Trap: If you pay AED 100,000 in rent annually, over 5 years you have spent AED 500,000. That is half a million dirhams with AED 0 equity to show for it.

The Buyer's Advantage: Monthly mortgage payments often align with (or are lower than) monthly rent for comparable units.

Security of Tenure

• Eviction Notices: Landlords can evict tenants with 12 months' notice if they wish to sell or move in.
• Market Fluctuations: If the RERA Calculator allows a rent increase, your cost of living goes up.
• Owning a property locks in your housing cost. If you decide to leave Dubai, the liquidity of the market (one of the highest transaction volumes globally) means you can sell or convert the asset into a rental property—which brings us yields. Dubai consistently offers rental yields of 6% to 8%, significantly higher than London (3-4%) or New York (3%).

Myth #3: You Need Millions in Cash to Enter the Market

The Verdict: False.

The Reality: High financing options and affordable entry points make Dubai accessible to the middle class.

The "Volume" Market Price Points

• Studios & 1-Beds: In areas like JVC, Arjan, or Dubai Silicon Oasis, high-quality apartments often range from AED 550,000 to AED 900,000.
• Townhouses: Entry-level 3-bedroom townhouses in emerging communities (like Dubai South or Dubailand) can be found starting from AED 1.8 million to AED 2.2 million.

Mortgages are Widely Available

• Properties under AED 5M: You can borrow up to 80% of the property value.
• Down Payment: You need a minimum 20% cash down payment (plus transaction fees).
• For a property costing AED 800,000, the down payment is AED 160,000. While substantial, this is far more attainable than the "cash only" myth suggests.

Myth #4: Service Charges Make Ownership Unviable

The Verdict: Exaggerated.

The Reality: Service charges are transparent, regulated, and pay for amenities you would otherwise pay for separately.

Service charges are the fees owners pay for the upkeep of the building and community. Skeptics often cite horror stories of hidden fees.

The "Mollak" System of Transparency

• Audit: Budgets must be audited and approved by RERA.
• Collection: Fees are paid into regulated escrow accounts, not the developer's pocket.
• Mollak System: Owners receive invoices through this government system, ensuring the charges are legitimate.

What Are You Paying For?

• 24/7 Security and Concierge
• Swimming pool and Gym maintenance
• Landscaping and cleaning
• Building insurance

Pro Tip: Before buying, check the RERA Service Charge Index. It is a public database where you can see the exact approved charges for any building in Dubai.

Myth #5: Dubai’s Property Market Is Only for Speculators

The Verdict: Outdated.

The Reality: The market has shifted toward end-users and long-term residents.

Ten years ago, Dubai was arguably a "flipper market." Today, the demographics have shifted. The introduction of the Golden Visa, a renewable 10-year residency visa for those who invest AED 2 million or more in property, has changed the game.

People aren't just parking cash in Dubai; they are moving their lives here.

Community Infrastructure: Developers are now competing on "livability." New master communities feature international schools, hospitals, retail centers, and vast green spaces within the development.

The "End-User" Shift: Real estate brokerages report that a significant percentage of transactions are now end-users buying homes to live in, rather than investors buying flips. This creates price stability and reduces market volatility.

The Actual Costs: What First-Time Buyers Need to Budget

To be truly helpful, we must look beyond the property price. Transparency builds confidence. If you are ready to buy, here is the "hidden" math you need to know.

When buying a ready property in Dubai, budget for approximately 6.5% to 7% over the purchase price in upfront fees.

Example:

• If you buy an apartment for AED 1,000,000:
• Down Payment (20%): AED 200,000
• Upfront Fees (6.5%): AED 65,000
• Total Cash Required to Handover: AED 265,000

How to Buy: A 4-Step Checklist for 2025

• Step 1: The Pre-Approval — Before viewing homes, speak to a mortgage broker. Get a pre-approval letter so you know exactly what the bank will lend you. This gives you negotiating power.
• Step 2: Form F (The Contract) — Once you find a property, you and the seller sign "Form F" (the MOU). This is the DLD-mandated contract. You will typically put down a 10% security deposit check (held by the broker, not the seller).
• Step 3: The NOC — The seller applies for a No Objection Certificate (NOC) from the developer. This confirms that all service charges have been paid, and the developer has no objection to the sale.
• Step 4: The Transfer — Once the NOC is issued, you, the seller, and the broker meet at a DLD Trustee Office. You hand over the manager's checks for the payment, and a new Title Deed is printed in your name instantly.

Final Thought

Misinformation creates hesitation. Hesitation in a market as fast-moving as Dubai often results in missed opportunities and priced-out buyers.

The Dubai real estate market is not without its risks—no market is. But the risks are not the myths you read about online. The risks are manageable variables like location choice, entry timing, and mortgage rates.

For first-time buyers, the most important step isn’t rushing into a purchase; it’s replacing assumptions with accurate, up-to-date insight. The data shows a mature, regulated market that favors those who do their homework.

Ready to crunch the numbers?

If you are considering taking the step from tenant to owner, the next logical step is to calculate your personal "break-even point" using current rental and interest rates.